​More Than a Marketplace: Crypto Platforms as Financial Intermediaries

Crypto asset service providers (CASPs) have long served as the backbone of the virtual digital asset ecosystem. They operate as marketplaces where users buy, sell, and trade crypto assets. But a recent paper by the Bank for International Settlements (BIS) argues that the world's largest CASPs have evolved well beyond that role. Today, the BIS finds, these platforms perform functions that closely resemble those of traditional financial intermediaries like banks and credit institutions. The BIS refers to such platforms as multifunction cryptoasset intermediaries, or MCIs. It also argues that understanding what they do, and how they do it, has direct implications for how they should be governed.
 
For  instance, most MCIs offer users access to “earn programmes”.  In earn programmes, customers deposit their idle assets with MCI’s in exchange for monetary returns. Customers transfer ownership of their crypto asset, for instance, a unit of a token, to the MCI for a set period of time. In exchange, the MCI promises to return the deposited asset with additional returns. The MCI then lends the crypto asset to borrowers, and returns a portion of the earnings they make back to the original customer. Regardless of how the MCI’s investment ultimately performs, the customer is contractually owed their unit of a token, or an equivalent amount, back.
 
MCIs are, in effect, doing what banks do. They are taking the customer’s funds and putting them to work. However, when banks enter and execute similar arrangements, they do so with strict rules and guidelines that ultimately protect consumers and their assets. For MCI’s however, no such guardrails are presently mandated by regulations.
 
The paper is careful not to frame MCIs as bad actors. The dynamics it describes arise from MCIs’ business model, not necessarily from intent. But it is equally clear that the regulatory architecture has not kept pace. As of 2025, only 11 of the jurisdictions surveyed by the FSB had a finalised regulatory framework addressing risks from crypto activities. Among those, only two covered MCI borrowing and lending activities.
 
If MCIs are to continue such functions, the BIS paper advocates a mix of entity-based and activity-based regulation. Entity-based regulation means that the MCI as a whole is subject to oversight, much like a bank is regulated as an institution rather than product by product. This would include requirements that are calibrated to the unique risks posed by each MCI's business model and the broader cryptoasset market. Activity-based regulation would further impose leverage limits, customer asset safeguards and similar guardrails. Robust governance frameworks, stress testing, and consolidated supervision are equally essential.
 
As MCIs deepen their links with traditional finance through exchange-traded products, custody arrangements and institutional partnerships, disruptions at a major platform may carry growing potential for broader spillovers. The paper does not argue that MCIs should not exist, or that their role is inherently problematic. It argues, instead, that a role of this scale should not remain outside the regulatory perimeter.